ACCA · Question 04 · IAS 38 Intangible Assets

Section A

BioGene is a biotechnology firm developing a new drought-resistant seed. During the year ended 31 December 20X6, BioGene incurred the following costs:

• $300,000 on initial laboratory research to identify potential genetic markers.
• $500,000 on testing the chosen seed prototype in controlled greenhouse environments (technical feasibility was established on the date this phase began, and BioGene has the resources and intent to complete and sell the seeds).
• $100,000 on training sales staff to market the new seed.

What total amount should BioGene capitalize as an intangible asset under IAS 38?